MicroStrategy says it may explore more ‘yield generation opportunities’ following bitcoin-backed loan deal

MicroStrategy announced its first-quarter financial results for 2022 on Tuesday, reporting $119.3 million in revenues for the period.

The firm, which holds more than 129,000 BTC on its balance sheet, said that non-GAAP expenses came in at $275 million for Q1, compared to $298 million in the first quarter of 2021. In Q1 2022, $170 million worth of those expenses were in the form of bitcoin impairment charges. 

“Loss from operations for the first quarter of 2022 was $170.0 million, compared to $183.2 million for the first quarter of 2021. Net loss for the first quarter of 2022 was $130.8 million, or $11.58 per share on a diluted basis, as compared to $110.0 million, or $11.40 per share on a diluted basis, for the first quarter of 2021,” MicroStrategy said. “Digital asset impairment charges of $170.1 million and $194.1 million for the first quarter of 2022 and 2021, respectively, were reflected in these amounts.”

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On the financial state of its bitcoin holdings, MicroStrategy said:

“As of March 31, 2022, the carrying value of MicroStrategy’s digital assets (comprised of approximately 129,218 bitcoins) was $2.896 billion, which reflects cumulative impairment losses of $1.071 billion since acquisition and an average carrying amount per bitcoin of approximately $22,409. As of March 31, 2022, the original cost basis and market value of MicroStrategy’s bitcoin were $3.967 billion and $5.893 billion, respectively, which reflects an average cost per bitcoin of approximately $30,700 and a market price per bitcoin of $45,602.79, respectively.”

In its earnings release, MicroStrategy made note of a bitcoin-backed loan deal with Silvergate via its MacroStrategy subsidiary and suggested it may pursue future deals of this kind. The loan deal was announced in late March.

“May conservatively explore future yield generation opportunities on unencumbered MacroStrategy bitcoins,” the firm said in its presentation document.